India's benchmark index fell by up to 2.5 percent on Friday, falling below 20,100 points. It came one day after hitting a two-and-a-half-year high, after the central bank increased the repurchase rate by 25 basis points to 7.5 percent. Many economists had widely expected the RBI to leave the rate unchanged.

Meanwhile, the rupee weakened 1 percent after RBI governor Raghuram Rajan also rolled-back earlier measures to support the currency,

Why did the Fed blink at the last minute?

Taimur Baig, Chief Economist, Asia at Deutsche Bank says that the Fed's guidance was clear and markets seemed prepared but with no taper this time, he expects the Fed to move in December.

Nikkei 0.2% lower

Japan's benchmark index fell in choppy trade after hitting a new two-month high at 14,816 points earlier in the session.

Billabong was the worst-performing stock on the index, down 7.4 percent after accepting a refinancing plan from U.S. hedge funds Oaktree Capital Management and Centerbridge Partners on Thursday.

US debt in focus

A day after the Federal Reserve left its bond-buying program intact, investor attention has turned to the the looming U.S debt ceiling. If President Obama's administration and Republicans can't agree to raise the nation's borrowing cap before October, the U.S. Treasury may not have many options left to avoid exceeding the $16.7 trillion debt limit, which could send the U.S. into default.

"The trick with the coming week is to look for news that a deal will be done; any news this is happening will see the U.S. markets supported. Risk-off to risk-on will be the trade here. The closer we get to Sunday September 30, the risk-on to risk-off trade is the one to watch," said Evan Lucas, market strategist at IG in a note.